COMMENTARY

How federal contracting can supercharge sustainability

The human and economic costs related to climate change have become nearly impossible to ignore. Natural disasters alone cost the global economy upwards of $390 billion a year. In response, industries, corporations and consumers are radically rethinking strategies to help enable a more circular and low-carbon economy.

At the same time, governments are adopting aggressive timelines to curb emissions. The Biden administration recently announced targeted reductions of 50 percent to 52 percent in economy-wide greenhouse gas emissions by 2030.

One reason these timelines have become so aggressive is that societies have largely been unable to move the needle when it comes to carbon reduction. A task this large requires more cooperation and coordination than most corporations or individuals are capable of achieving on their own. But climate change isn’t the only challenge our society faces in order to become more sustainable. Human rights, digital equity, inclusion and more are all linked to progress that’s urgently needed today.

With its immense purchasing power, the federal government has the ability to drive holistic sustainable innovations in the private sector, particularly in the technology industry. By creating sustainability standards and including sustainability clauses in requests for proposals, government can realize that potential.

The power of scale

From this point forward, companies will be judged by more than the profits they generate; they will be measured by the value they create for society. By virtue of the federal marketplace, the government has an opportunity to incentivize its contractors to heed that mandate.

And because of its size, it can do so on a larger scale. According to Bloomberg Government, $682 billion was spent on contracts in fiscal 2020—a record expenditure for the government. That figure is a sharp reminder that the federal government’s buying power is the single biggest tool it has to produce meaningful change at a national and local level.

Think about it this way: every time you get in your car, you put your seat belt on. Seat belts save lives, so Congress decided to incentivize their use. It did so by refusing to give states tax money for highways, bridges and other infrastructure unless they met or surpassed a base seat belt use rate. This tactic worked.

In 2020, nearly two decades since this campaign began, the national seat belt use rate was at 90.3 percent. If similar programs were created for climate action, adopting long-term sustainability practices would become the norm.

The health of our planet is paramount to our future as humans. By signing the Paris Agreement, the U.S. has already put down a marker globally, demonstrating its commitment to a more sustainable future. By requiring contractors to meet sustainability standards in order to win contracts, the government can use its substantial buying power to make sustainability more than just the right thing to do—it becomes a direct path to business growth as well.

Raising the standard

A good incentive has to be quantifiable. Using the Paris Agreement or the Environmental Protection Agency’s environmental action plan as a framework, the federal government should be able to identify the types of corporate behavior that can move the needle. For example, measuring the amount of recyclable content used in the devices the government purchases could provide a useful baseline—and a target for improvement.

Through this process, the government could develop a set of sustainability standards that it could embed in its requests for proposals. This model already exists in other areas, such as cybersecurity, where the government’s NIST 800 standards have set a high bar for device manufacturers and technology developers.

Similarly, the recent executive order to accelerate cybersecurity advancements will push industry to evolve. These benchmarks have produced greater attention to cybersecurity and faster innovation of new secure technologies across both the public and private sectors. The EPA could use a similar model to incentivize sustainability.

Advances in sustainability have historically been slow because private industry needs time to evolve. Developing standards in cooperation with industry can get all stakeholders pulling in the same direction. The government’s priorities become the industry’s priorities, resulting in more consistent progress. 

Improving sustainability through government contracts will ultimately have a greater impact on national and global climate action, human rights and digital equity. If new standards are created now to achieve the United Nations’ Sustainable Development Goals, our society will see meaningful results from the public and private sector and adopt a new mentality for climate action.

About the Author

Todd Gustafson is president of HP Federal and head of U.S. Public Sector.

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